Correlation Between Merck and Emerging Europe
Can any of the company-specific risk be diversified away by investing in both Merck and Emerging Europe at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Merck and Emerging Europe into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Merck Company and Emerging Europe Fund, you can compare the effects of market volatilities on Merck and Emerging Europe and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Merck with a short position of Emerging Europe. Check out your portfolio center. Please also check ongoing floating volatility patterns of Merck and Emerging Europe.
Diversification Opportunities for Merck and Emerging Europe
-0.86 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Merck and Emerging is -0.86. Overlapping area represents the amount of risk that can be diversified away by holding Merck Company and Emerging Europe Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Emerging Europe and Merck is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Merck Company are associated (or correlated) with Emerging Europe. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Emerging Europe has no effect on the direction of Merck i.e., Merck and Emerging Europe go up and down completely randomly.
Pair Corralation between Merck and Emerging Europe
If you would invest 405.00 in Emerging Europe Fund on August 30, 2024 and sell it today you would earn a total of 0.00 from holding Emerging Europe Fund or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 4.35% |
| Values | Daily Returns |
Merck Company vs. Emerging Europe Fund
Performance |
| Timeline |
| Merck Company |
| Emerging Europe |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Merck and Emerging Europe Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Merck and Emerging Europe
The main advantage of trading using opposite Merck and Emerging Europe positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Merck position performs unexpectedly, Emerging Europe can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Emerging Europe will offset losses from the drop in Emerging Europe's long position.| Merck vs. Emergent Biosolutions | Merck vs. Bausch Health Companies | Merck vs. Neurocrine Biosciences | Merck vs. Teva Pharma Industries |
| Emerging Europe vs. Tekla Healthcare Opportunities | Emerging Europe vs. Health Biotchnology Portfolio | Emerging Europe vs. Alphacentric Lifesci Healthcare | Emerging Europe vs. Deutsche Health And |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
Other Complementary Tools
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets |